Amazon Tackles Product Damage Problem
By Devin Partida, ReHack.com
E-commerce giant Amazon recently announced a new policy change, effective Sept. 1, 2021. The return plan will award customers who experienced property damage or personal injury due to damaged products.
According to its A-to-Z guarantee, Amazon will now pay customers directly for defective products sold by Amazon retailers or third-party sellers. In the past, Amazon would encourage customers to reach out to the seller directly — but that's no longer the case.
What Does This Mean For Customers And Sellers?
This is good news for customers and sellers. Customers can shop more confidently knowing that Amazon has their backs. As long as sellers follow Amazon's policies and have some form of insurance, they won't be responsible for reimbursement.
One issue Amazon customers have faced in the past is when third-party sellers are unresponsive. With this new policy in place, Amazon does most of the work to ensure people receive support regarding damaged products.
In addition, if third-party sellers believe the claim is unwarranted, Amazon will still make payments up to $1,000 to the disgruntled customer.
The main thing to keep in mind is that Amazon will facilitate communication between customers, third parties, and sellers' insurance providers. It's no longer between the buyer and the seller.
Customers can have more confidence when they shop, knowing they'll be covered if they receive a defective, damaged, or improperly labeled product. As long as sellers are doing what Amazon requires and their products are high quality, they shouldn't have to worry about the policy change.
What Does This Mean For Amazon?
In recent years, Amazon has been under the microscope for selling faulty goods in its marketplace. Some U.S. courts have agreed with Amazon's perspective that it’s not the party that should be held accountable, while others have not.
Amazon has over 1 million active sellers on its platform, so the problem has only become more prominent over the years. While Amazon relies on Big Data to vet third-party sellers, it can be challenging to nail every single one and keep the marketplace free of damaged goods. That’s the cost of doing business.
This year, the Consumer Products Safety Commission (CPSC) sued Amazon for selling 24,000 faulty carbon monoxide detectors in addition to 400,000 hair dryers that could cause damage.
In another newsworthy case in 2016, a mother who ordered a hoverboard for her son did not know that it would explode or cause any damage to her property. As a result of the defective product, a fire broke out and the family was trapped inside their home, leading them to jump out of a second-story window. The fire ended up destroying the Nashville family's $1 million residence.
Naturally, Amazon's liability risk came into question when this occurred, which may be one reason for the new policy change. Because Amazon hosts so many third-party sellers, it's no wonder that questions about who's at fault for defective products arise.
Amazon maintains it is not responsible for defective products and that the seller is at fault. It'll be interesting to see in the future how more third-party sellers interact with Amazon, knowing that any defective products will be traced back to them.
Other online retailers will likely be subject to the same scrutiny as Amazon — but it's yet to happen. Stores should certainly do their best to remove or rework their products to better satisfy their customers.
Amazon's New Insurance Accelerator
Because Amazon requires third-party sellers to have product liability insurance, they've also announced a new Insurance Accelerator program. To assist sellers with finding decent insurance, Amazon will intervene and help them find the right insurance plan.
The new tool does not require sellers to use the recommended insurance provider. Still, it's undoubtedly a valuable resource for third parties shopping for insurance.
The Bottom Line
Amazon's new policy will be a game changer. More concerns regarding faulty products are bound to arise. However, Amazon will likely claim the third-party seller is responsible for any defective products. As the holiday season approaches, it will be telling if this new policy change impacts customers and sellers alike.
About The Author
Devin Partida is a writer and blogger interested in retail technologies and business solutions. To read more from Devin, visit ReHack.com, where she is the Editor-in-Chief.